Moments of truth are ones that many of us know all too well – and the moments that we all dread.
You’ve been faithfully paying your car insurance premium all these years. Your carrier seems ok, but you don’t really know.
You’ve never had to use the insurance.
Suddenly, your car smashes into another car. The police arrive. The tension builds.
And in the throes of emotion, you brace yourself, call your insurance agent, and file a claim. Something that hasn’t meant much – your dealings with a company that holds great power over how you experience a trauma – now means everything.
It’s known as a moment of truth, and while the phrase may seem obvious, it’s actually an important concept in the world of customer experience. Some even call it “foundational” to designing positive interactions between consumers and companies.
What Is A Moment Of Truth?
Moments of truth are broadly defined as those points in time where a customer forms an impression of a product, brand, or service. They can be positive, negative, or somewhere in between.
The idea dates to, believe it or not, Scandinavia – specifically Jan Carlzon, president of Scandinavian Airlines.
Back in the early 1980s, he defined the Moment of Truth as: “Any time a customer comes into contact with a business, however remote.” That crucial first interaction, Carlzon said, gives consumers “an opportunity to form an impression” and companies the chance to make sure that initial feeing is positive.
Some in the customer experience field say the Moment of Truth concept was actually coined by former Procter & Gamble CEO A.G. Lafley, an advocate of building brands by embracing “customer empathy.”
Whoever deserves the credit, it’s clear that P&G became early Moment of Truth evangelists. In 2004, the company created a Director of First Moment of Truth (FMOT), along with a 15-member FMOT department at corporate headquarters in Cincinnati.
What was that First Moment of Truth, as P&G memorably called it? The three to seven seconds when a shopper first notices an item on a store shelf.
Clearly, that was before online shopping became a major thing. And perhaps not surprisingly, it was Google that in 2011 developed the next iteration: the “Zero Moment of Truth.”
Popularized in an e-book by Jim Lecinski, Google’s managing director of U.S. sales and service, the zero moment for marketers refers collectively to how consumers were now searching for options online, reading reviews, and comparing prices before making a purchase.
The era of online retail had arrived.
Multiple Moments of Truth
As you can see, there is no single definition of Moments of Truth. For our purposes, broadly speaking, let’s agree on at least four:
- Less than Zero Moment of Truth: The moment when something happens to spark a potential customer’s interest in a brand or service and he or she is willing to be contacted by a company. This occurs before the consumer does active research into a purchase.
- Zero Moment of Truth: Popularized by Google. See above.
- First Moment of Truth: P&G’s brick-and-mortar contribution. See above. (In the digital age, this has been broadened to include first encounters online).
- Second Moment of Truth: The customer’s initial use of a product and how it makes them feel – their customer experience, so to speak. This can mean opening a box, turning on a smart phone…or filing an insurance claim.
Many Companies Embrace Moments of Truth, but The Insurance Industry Lags
As they try to map out the customer journey, many companies have endorsed Moments of Truth and worked to make them a positive experience for customers.
Leaders in the field agree. As far back as 2006, consulting firm McKinsey & Company wrote that Moments of Truth are vital in helping to “transform wary or skeptical people into strong and committed brand followers.”
The key moment, McKinsey said, is when customers “invest a high amount of emotional energy in the outcome.” Such scenarios can include, for example, a canceled flight or a lost credit card.
Related: Get Out Of Your Customer’s Way!
Which brings us back to where we started: that call to the insurance agent after an accident. It is perhaps the ultimate Moment of Truth because until then, you really don’t know what your experience will be because you haven’t used the product.
It’s just been a bill to pay. Now it’s a moment to experience, and an emotional one at that.
Yet some experts say the insurance industry hasn’t fully embraced the idea of Moments of Truth, often to its detriment.
“For insurers the Second Moment of Truth is a potentially lifetime defining interaction,” writes one digital insurance platform. “A consumer will call the insurer with a claim, and the response from an insurer will either re-assure the consumer – or drive them to despair.”
The platform, fintechOS, adds that insurers “are widely regarded as laggards in the field” of customer experience broadly and “less engaged with the philosophy” of Moments of Truth specifically.
What can consumers do? The question seems to be more: what can insurers do to make it more likely your experience will be positive when you make that phone call?
Plenty has been written about how the industry can improve its customer experience. Here’s one example: a thought leadership piece on how insurers can “move beyond incremental improvements” and create a better and less stressful “moment of truth for claims.”
As with most elements of the customer experience, creating a customer journey map and detailing each step – along with the associated people, technology, and customer emotions at play – is a good start.
Then put yourself in your customer’s shoes and try to empathize. First, make sure to ask if everyone is OK after an accident. Then, understand that the customer is probably shaken up, scared, angry, exhausted, or some combination of those.
It’s an incredibly emotional time, so meet that emotion with calm, genuine concern, and clear next steps. What happens next will determine whether that customer is loyal for many years to come, or leaves for a hoped-for better experience somewhere else.